Brazil Inflation Ends 2025 at 4.26%, Within Target Band

Overview

• IBGE reported a 0.33% rise in December IPCA, taking 2025 inflation to 4.26%, the first full-year result inside the Central Bank’s tolerance since 2019.
• The INPC closed at 3.90%, setting the 2026 minimum wage at R$1,621 (6.79% increase) and raising INSS benefits above the floor by 3.90%, with the previdentiary ceiling near R$8,475.54 and payment in the January payroll.
• Markets reacted cautiously as futures rates inched higher and equities’ gains were limited, with desks highlighting firmer services and core readings while the Selic remains near 15%.
• Energy drove much of the year’s inflation pressure (electricity up about 12.31%), while food inflation cooled to 2.95% after midyear declines; in December, transport rose and housing fell on cheaper electricity.
• With the new minimum wage, the 35% payroll-loan cap lifts the maximum installment from R$531.30 to roughly R$567.35, and officials stress tighter fraud controls such as facial recognition on Meu INSS.